Today's Asian market summary

A quiet session as market participants digest recent events and market exhaustion weighs on volumes.

A quiet session for EUR pairs – EUR/USD was in a narrow (1.3110 – 1.3140) trading range. Over the past hour, we’re seeing fairly strong bullish EUR sentiment which is helping EUR pairs break to the top side of their daily ranges.

GBP/USD was also range bound (1.5430 – 1.5450) during the Asia session, drifting a lower in close correlation to EUR/USD, and now breaking higher on the back of weaker USD sentiment.

USD/JPY was only slightly more active than the other majors, trading down to 97.50 support in early Asian trade. We saw a nice bounce in USD/JPY alongside Japanese equities but overall we’re still within the consolidation zones etched out after last week’s blockbuster FOMC meeting.

The highlight of the Asian session is the Shanghai Composite Index which opened weak and drifted lower, printing new lows. The AUD/USD followed suit as risk-averse investors continued to close AUD longs and move into USD, in fear of further deleveraging and risk aversion. Commodity currencies continue to be stuck in a self-fulfilling prophecy of fear induced declines inducing investors to further trim long AUD/USD positions to avoid further losses. Having started the trading day close to 0.9250, the pair declined to as low as 0.9200 before bouncing back. Monday’s low of 0.9147 seems to be solid ground for support – at least for the time being as market participants digest recent events and market exhaustion weighs on volumes.

Commissioned by Think Forex

Written by George Tchetvertakov